Buying a parking lot may increase the plan of Kikar Atarim Towers

It’s hard to overstate the real estate drama generated by the news this week of Sefi Tzvieli winning an underground parking auction at Kikar Atarim in Tel Aviv. Tzvili will pay NIS 257 million to the Tel Aviv municipality, in addition to the NIS 84 million he will pay to the JLTV fund for its 27% stake in the parking lot. Besides the commercial significance of the deal, the drama mainly lies in the fact that the businessman decided to pay a very high price for one real estate asset with the aim of sabotaging another plan: Tzvieli is known as one of the most prominent opponents of the plan to build towers on Kikar Atarim. There is no precedent for a situation in which a plan that has been promoted for years at a cost of millions of shekels, and which involves a multi-directional creative effort, in collaboration with the municipality and the planning department, must fade overnight and disappear. . Kikar Atarim spans 27 acres (6.75 acres), with buildings erected in the 1970s on several levels, including an underground car park, gas station, covered shopping levels, and a pedestrian public plaza. Pedestrians enter the square via a ramp from Ben Gurion Street that blocks the view of the sea from the direction of the avenue. For many years, the site was in a dilapidated physical condition, with deserted and closed areas. The rights holders of the site are the Tel Aviv Municipality, Atarim Ltd., and a number of private owners. The Kikar Atarim renewal saga began ten years ago when it purchased a company called Idit Properties Management Ltd. (JTLV) All assets on site except for the parking lot which was jointly owned with JTLV. The partners promoted the deal with the aim of realizing a project comprising of luxury residences, commercial spaces and hotel rooms. JTLV reached an understanding to sell the Tel Aviv municipality stake in the parking lot for NIS 150 million, and in 2017 the city council approved the deal. The original plan, by the famous British architect Norman Foster, proposed the demolition of the existing square and its buildings, and the construction of four towers, two of 26 stories, one of 31 floors, and one of 36 floors. The plan included 80,000 square meters of hotel and residential space, 4,000 square meters of public space, commercial space and ten acres (2.5 acres) of open space. In 2018, after a protest by the “No Towers on Kikar Atarim” association, the District Court decided to bring the plan back for discussion at the Coastal Environmental Protection Committee. In June 2018, the commission approved a plan for two 25-storey towers. In late 2019, the Tel Aviv municipality held a public participation conference in which all parties were allowed to express their views on the plan. JTLV representatives have expressed their desire to move forward with the plan as agreed with the city’s Department of Engineering. Opponents of the plan argued that it meant a severe blow to the public, to the horizon, and to access to the sea. Related to auctions in Tel Aviv, Tel Aviv’s Kikar Atarim car park approved Kikar Atarim’s reduced plan to protect the coast from cutting off Kikar Atarim towers, Tzeili petitioned the Tel Aviv District Court in 2018, claiming that the Tel Aviv municipal stake sale deal is in a position The cars were improper and that the municipality had a duty to hold a public auction. The court ruled in his favour, a decision that was later upheld by the Supreme Court. In May this year, a tender with a price of at least 184.5 million shekels was published on the basis of the appraiser’s opinion, which raises the question of why an experienced businessman like Tsvili paid an additional 73 million shekels. A downstream decision to purchase an underground car park greatly thwarts the construction project planned for the site. JTLV previously said that planning for the Kikar Atarim project is at an advanced stage and that the sale of the position for all investors will not affect it. She even said that if she didn’t win the auction, she’d have an extra partner. Be that as it may, the victory of Tzieli, the strongest objector to the draft of the towers, spoils the plans. Not only that, but the owner of the position owns 12% of the public building rights, which will make it difficult to move forward with the project. JTLV will probably not cooperate with Tzvieli. The Tel Aviv municipality insists that the car park purchase is of no real significance, and that the construction plan will go ahead. Sources in the JTLV fund told Globus that the high price that Tsfeli paid for parking made the fund’s management realize that the towers project was not economically viable in its current form. Tzvieli now has many possibilities open to him. It can be satisfied with the urban construction plan currently in force, which allows 27,000 square meters of built area. Practically speaking, this could mean adding a few floors to the Marina Hotel on site. Another possibility is to support the plan of the towers, but to demand a more moderate design, with two 25-storey towers, but with a floor coverage of 1200 or 1000 square meters instead of 1,400 square metres. Published by Globes, Israel business news – en.globes.co.il – on July 21, 2021 © Copyright Globes Publisher Itonut (1983) Ltd. 2021